SoftBank's probe gives clean chit to Nikesh Arora

NEW DELHI | BENGALURU: SoftBank has given a clean chit to Nikesh Arora, its president, after a special committee of independent board members completed its review of the allegations against the former Google executive and found them to be without merit.

In a statement on Monday, the Tokyo-headquartered telecom, media and internet conglomerate said, "The Special Committee has concluded that the claims concerning the conduct of Arora during his tenure at SBG are without merit." It said that the committee, which was formed in February, conducted the review with the assistance of inde pendent counsel at Shearman & Sterling and Anderson Mori & Tomotsune.

"As I said when these allegations first became public, I have complete trust in Nikesh and I am pleased the special committee has looked into these claims thoroughly and concluded they are without merit," the statement quoted SoftBank CEO Masayoshi Son as saying.

The development comes five months after New York-based law firm Boies Schiller & Flexner, representing unnamed SoftBank shareholders or the stock owned by them, charged SoftBank with not exercising due care in appointing Arora, who they alleged was guilty of a "series of questionable transactions, poor investment performance and conflict of interest."

The letter, the contents of which became public only in April, also called into question Arora’s decision to purchase SoftBank stock worth $483 million last year, and called it an attempt by the company to assuage concerns relating to his performance.

Arora, who is widely regarded as the heir-presumptive to Son, is one of the world’s highest-paid executives, with compensation of about $135 million in 2014-15. He joined SoftBank in 2014 from Google, where he was the chief business officer.

The letter to the SoftBank board also questioned the company’s investment in Indian startups Snapdeal and Housing. Since Arora joined, SoftBank has become the biggest backer of Indian technology-focused ventures, pouring over $1 billion into the country’s startups. Its investments also include ride-hailing app Ola and on-demand grocery delivery company Grofers.

Mumbai-headquartered Housing, which received about $90 million from SoftBank, went through a period of turmoil resulting in the firing its founder Rahul Yadav about ayear ago.

"We are not at all surprised that any questions regarding Nikesh have been concluded to be completely without merit," Housing CEO Jason Kothari told ET. "Nikesh and his team have been invaluable mentors and supporters of Housing through both great times and difficult times, helping steer us back to success."

The letter written on behalf of anonymous investors also question the wisdom of investing in the online marketplace Snapdeal.

In April, Snapdeal CEO Kunal Bahl, responding to the allegations against Arora, tweeted "Any entrepreneur in the world wld be fortunate to have @nikesharora as an investor."